SINGAPORE – Singapore has retained its position as the world’s leading business environment for the 15th consecutive year and should remain the best place to operate for the next five years, according to a leading market analyst.

Canada and Denmark were placed equal second in the annual rankings by the Economist Intelligence Unit (EIU), with four European countries plus the United States, Hong Kong and New Zealand making up the top 10. Regional economies Australia, Taiwan and South Korea made it to the top 20.

The EIU weighs up a range of categories to assess how a territory has managed over the previous five years and how it might fare in the following five.

It found that Singapore had perfect scores in the areas of policy towards foreign investment and foreign trade and exchange controls.

It was also the highest-scoring country in terms of technological readiness, a sign of government policies to develop technology infrastructure and the start-up ecosystem. The Government is also a pioneer in rolling out high-technology solutions throughout public services, the EIU added.

Singapore’s score on tax remains stable, but the EIU noted that major changes are in the offing.

These include higher indirect taxes and an increase in levies imposed on high-income people and luxury goods consumers in the next few years, while the start of significant rises in carbon taxes later this decade will also have an impact.

The labour market remains one of Singapore’s few real weak points, the EIU noted, adding that it expects the country’s score to decrease slightly over the next five years.

Although upskilling has been a main focal area among workers, tighter restrictions on foreign labour will worsen staff shortages already hampering many major sectors.

The EIU rankings measure the quality or attractiveness of the business environment in 82 countries and economies, and are based not only on historical conditions but also on expectations about the following five years.

The model examines 11 categories, such as political and macroeconomic environments and market opportunities. Each category contains a number of indicators that are assessed by the EIU for the past five years and the next five.

The biggest improvers over the past year were Vietnam, Thailand, Belgium, Sweden, India and Costa Rica. Vietnam was the overall biggest mover worldwide, climbing 12 spots in the rankings, while Thailand improved by 10 places and India by six.

The biggest declines were in China, Bahrain, Chile and Slovakia. China was the biggest loser globally, falling 11 spots from a year earlier.

Although the end of the zero-Covid policy was good news for firms operating in China, regulatory changes and rising costs are weighing on the business environment and limiting opportunities for international investors, the EIU added.